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Monarch General Hospital Business Case Analysis

Executive Summary

Health care service provision is affected by the shortages in nursing personnel. To raise the numbers of nursing Monarch General Hospital Business Case Analysispersonnel available in a high demand setting Monarch General Hospital will have to consider a number of managerial options that best fit in the set targets. Reduction of costs and sustainable quality of services will be the main consideration areas for the management. Among the main options, short-term hiring, permanent hiring, redeployment from underutilized sections as well as overtime sessions will be discussed in this discourse. A few recommendations and conclusion are also included in the tail end of this presentation.

Business Case Analysis


The health care industry is among the high-end service sectors defined by the nature of labor delivery conditions such as supply of skilled labor. Shortages in labor supply in the industry affect the entire industry as well as compromise the health of patients seeking health care. The high skill demand required in health care services implies that the supply of labor in the industry is affected by the variables in other sectors such as the education sector. Additionally, healthcare labor market is affected by economic factors that tend to push remuneration pretty higher than many other service industries.

With an increase in demand for health care services, against a backdrop of shortages in labor supply and difficult economic times, it is difficult for health care systems to comfortably balance the industry. In light of the managerial decisions needed to maintain professionalism in the industry and safeguard health care provision, staffing service delivery programs such as extra shifts is a delicate issue. As illustrated below, staffing an additional shift must be conducted from an informed perspective in view of high demand, financial and labor supply constraints (Minnesota Department of Health, 2002). Business models as well as health care requirements must be balanced for the best outcomes in managing the new shift.

Business and Operational Impacts

Nursing services complement the other professional practitioners’ services in many cases and constitute the biggest personnel input needed for routine follow-up. The bulk of institutional earnings originate from the institution’s ability to sustain the demand for health care services. In view of the difficult setting to deliver services sufficient to earn sustainable returns, Monarch General Hospital management has to ensure that the extra shift is realized. Due to the financial difficulties that health care industry and the general economy are currently experiencing, enhancement of capacity to tap the business opportunity availed by the high demand must be considered. The service industry has a better chance to conduct business within difficult economic setting if the necessary reorganization is realized. The mandate of the Monarch General Hospital management in reorganizing the human resource needed for the opportunity however must be done on a cost-benefit analysis within lean management of resources.

Nursing personnel body is important in direct implementation of health care service delivery programs. A shortage in nursing personnel implies that the core of health care provision is disabled since the bulk of service delivery is borne by the nurses (Cohen, 1995). Ordinarily, a functional the health care personnel estimations has the nursing personnel perhaps occupying the base of the numbers pyramid indicating the huge role they play in supporting the service delivery. To illustrate the level of compromise on the operations at Monarch General Hospital, the current demand for health care slotted into the extra shift risks complete failure. This implies that the excessive demand for health care services at the hospital will remain a major challenge to realization of offering prompt and quality health care.

Options and Cost-Benefit Analysis

  1. Hiring additional permanent personnel

The cost of hiring new permanent nursing personnel within the context of prevailing economic environment is too much to contemplate. Due to high cost of living, the wages cost is abnormally high for employers to freely choose to employ new employees on a permanent basis. In fact, the trend in several service industries is laying off staff to avoid the high cost of sustaining the human resource due to economic pressure on wages. However, it appears that the decision to hire permanent personnel may be an option to consider, bearing in mind that there is sufficient demand for health care services. The number of nursing employees that the current wage budget can sustain may not meet the exact demand for personnel in the shift. These variables imply that the costs of carrying out hiring of permanent nursing personnel by far outweigh the benefits in the long-term analysis.

  1. Hire short-term temporary personnel

By deciding to hire nursing personnel on temporary basis for the short-term, the management at Monarch General Hospital will not solve the problem of excessive demand. Apparently, a long lasting solution is needed for the ever-rising health care services demand by devising an internally friendly solution. By choosing to hire temporary personnel for the short-term, the management at Monarch General Hospital may not be prepared to take advantage of long term benefits of a settled nursing personnel body. However, it is an option that may facilitate the initial program for an extra shift by assisting the current personnel to reorganize and cope with the challenges. Since the costs outweigh the befits of choosing this option, the management will have to consider another alternative.

  1. Pull personnel from other underutilized units

By reviewing the current capacity at Monarch General Hospital and relocating it to the new project, the hospital management will formulate one of the best approaches for the extra shift program. Firstly, there will be no extra costs incurred for the new program making it admissible within lean operations setting demanded by the prevailing economic times (Carayon, 2011). Secondly, there will be no costs in form of adjustment, training, induction, and time since the relocated employees have sufficient knowledge of internal operations. However, to identify the element of under utilization of personnel may affect the delivery of services in the other units directly or indirectly. This is perhaps the best option based on the numerous benefits against fewer costs when compared with the other options.

  1. Pay overtime and bonuses to current employees

Whereas employee motivation is influenced by the remuneration package offered, delivery of service is a factor of several other factors that may not be met by offering bonuses and overtime remuneration. In this respect, the quality of health care service delivered by nurses working for extra working hours is certainly going to be affected despite better pay. There are cases of health care personnel making mistakes for having worked for longer than allowed despite being paid well for extra hours worked. Such a move compromises on the public image held about the risks posed to patients visiting Monarch General Hospital.

Conclusions and Recommendations

From a managerial perspective, optimization of internally available resources and capacity in operations is the first step in deciding if extra staffing procedures are to be executed. Due to the financial constraints facing the general economy, it is important to ensure that the current capacity is utilized and retain the available human resource (Lofland and Pizzi, 2006). This may be a human resource tactic to spur motivation in contrast to hiring extra employees, raise the wage pressure and finally lay off a huge fraction when economic realities catch up. By redirecting human resource from underutilized units to more needy units, diversity may be triggered within the operations, breaking monotony and spurring concentration.

Implementation strategy will include a review of the human resource needs of every department at the lean operations setting eliminating wastage and excesses of human resource allocation. Identifying the actual needs of the new shift will facilitate the redeployment of excess personnel into the new shift and in other sensitive units. Reviewing the progress of the new shift against the current shift and set out targets will ensure that the new shift is kept under checks for quality operations and service delivery. In order to obtain approval from the overall hospital authority, the current cost burden for sustaining the underutilized human resource will be highlighted. The benefits of the utilization of internally available capacity will also be explained against the cost of external hiring as well as impacts of overtime on costs and quality (Penner, 2003).

In conclusion, it is important that the health care provision at Monarch General Hospital be approached from a quality management perspective that addresses reduction of operational costs while optimizing current capacity. In light of the economic difficulties faced by the service industry, health care service provision must not be compromised by profit oriented moves by ensuring quality services delivery.

  • Carayon, P. (2011). Handbook of human factors and ergonomics in healthcare and patient safety. Boca Raton, FL: CRC Press
  • Cohen, M. S. (1995) Labor shortages as America approaches the 21st century. Ann Arbor, MI: University of Michigan Press
  • Lofland, J. & Pizzi, L. (2006). Economic evaluation in US health care: Principles and applications. Sudbury, MA: Jones & Bartlett Learning
  • Minnesota Department of Health (2002). “Labor Availability and Health Care Costs,” Retrieved from: https://www.health.state.mn.us/divs/hpsc/hep/publications/legislative/lbrcsts.pdf
  • Penner, S. J. (2003). Introduction to healthcare economics and financial management: fundamental concepts with practical applications. Philadelphia, PA: Lippincott William & Wilkins

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